Tuesday, October 21, 2008

Volume Disappoints Again

Last week I looked at the extremely light volume on the Nasdaq rally and suggested it had bearish implications. The plunge came soon after. Monday’s rally was also suspiciously light. This time the setup occurred in both the Nasdaq and the S&P. Below are the stats for the S&P:



Volume action continues to disappoint. I’d be surprised to see a reaction as negative as last week, but volume is suggesting that perhaps buying enthusiasm isn’t as strong as would appear based on price alone. A pullback may likely be in order in the next few days.

2 comments:

David said...

Rob, what quant perspective suggests that a potential short term downdraft would not be as strong as last week's? Dave

Rob Hanna said...

Last week was especially sharp compared to the rest of the sample.